White Collar Crime Prof Blog

In the News & Around the Blogosphere

DOJ Press Release, Florida Man Pleads Guilty to $30 Million Investment Fraud Scheme

13 News, Four convicted and sentenced in youth research lighter testing fraud case (note the sentence of 2 years probation in a New Jersey case - hats off to attorneys Todd Foster and Christina Kimball)

Mike Scarcella, Legal Times, AG Holder: Prosecutors Target 'Financial Backbone' Of International Crime

ABC7News, Blagojevich sentencing set for October 6

David Ingram, BLT Blog, 9th Circuit Denies Rehearing in Renzi Case

Walter Pavlo, Forbes, How Much Prison Time? – There’s an App For That (w/ a hat tip to Peter Henning)

Mike Scarcella, BLT Blog, D.C. Circuit: Prosecutors' Comments Not Enough For New Trial

Tom Melsheimer & Craig Smith, Houston Chronicle, Businesses’ fear of U.S. jury system is irrational

PRNews, Cadwalader Attorney Nominated for Department of Justice Position (Michael Horowitz)

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Commentary on Second Circuit Opinion in AIG and General Re Execs Case

Reported here is the decision in the Ferguson, et. al. case, in which the Second Circuit vacated the convictions. Commentary:

• It's a 77 page court decision and having several university degrees would assist in understanding the technical aspects of the business workings described here.  One can only imagine the difficulty faced in explaining this to a lay jury.
• The court finds two errors by the district court, namely that it: "1) abused its discretion by admitting the stock-price data, and 2) issued a jury instruction that directed the verdict on causation."
• Part of the problem with the admission of the stock-price data was that the "[a]lthough the evidence was admitted only to show materiality, the government exploited it to emphasize the losses caused by the transaction."
• With respect to the jury instruction, the court noted that "[i]n seeking to accommodate the reasonable phrasings offered by the various parties, the court ended up with a charge that allowed the jury to convict without finding causation."
• The defendants had not objected to the causation instruction, but the court found the error as plain error. 
• The court did not find several other errors that were claimed by the defendants.
• The Global Tech (see here) decision of the Supreme Court is referenced, but it offers no assistance to these defendants.
• The court notes that the case depended heavily on the testimony of two cooperating witnesses and that their testimony was "bolstered by contemporaneous recordings of calls involving" one of them. But the court also later states with respect to one of these witnesses -  "Certain factual inconsistencies in Napier's testimony are sufficiently obvious to raise an eyebow, but most of the arguments are meritless."
• The court states: " Since we are vacating the judgments on the grounds discussed above, we need not reconcile these cases or decide whether the prosecution's actions amounted to misconduct. . . . No doubt it is dangerous for prosecutors to ignore serious red flags that a witness is lying, and the government will doubtless approach Napier's revised recollections with a more skeptical eye on remand." The court does note that it would have been difficult for the government to verify the facts and that there was cross-examination and summation "which resolved the credibility issue against the defendants."
• In light of this, would it really be the "right" action to retry this case?  Hasn't the cost (including emotional cost) to the clients been sufficient by this prosecution?  I can't help but recall the sentencing hearing of one of the accused individuals here, when the judge stated,  "Ms. Monrad was not motivated by personal gain."
• To the government - please spend our money wisely.

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Op-ed on Fraud Guidelines

A must-read op-ed by James Felman and Mary Price in the National Law Journal titled, Four reforms would restore common sense to sentences that have become draconian, disproportionate to the crimes.

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Execs of Gen Re and AIG - Convictions Vacated

The Second Circuit vacated and remanded for a new trial the convictions of four executives of General Re and AIG. The decision is here.  Commentary to follow.

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In the News & Around the Blogosphere

Ravi Somaiya, NYTimes, British to Expand Inquiry Into Murdoch Media

Michael Pollick, Herald Tribune, Beau Diamond's appeal based on $200,000 Lamborghini

Sarah N. Lynch & Matthew Goldstein, Reuters, Exclusive: SEC builds new tips machine to catch the next Madoff  

Joshua Gallu, Bloomberg, Diageo Agrees to Pay $16 Million to Settle Corruption Claims

David Stout, Main Justice, In Hill Testimony, DOJ Backs 'Clean Up Government Act'

Mike Scarcella, BLT Blog, Judge Orders Release Of Richard Nixon's Watergate Testimony

Victoria Kim, LATimes,Judge indicted in bribery case faces rare criminal prosecution  (w/ a hat tip to Ivan Dominguez)

Sue Reisinger, Corporate Counsel, A&O GC Russell Mackert Sentenced to 15 Years in Prison for Fraud

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